Question 1

A mortgage of $198 000.00 is to be amortized by payments over 22.5 years. If the payments are made at the end of each month and interest is 8.75% compounded semi-annually, what is the size of the monthly payments?

Accepted Answer

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Question 2

You make 6 quarterly deposits starting at $135 and increasing at a constant rate of 4.5%. The interest rate is 8.4% compounded quarterly. What is the size of the last deposit?

Accepted Answer

A)  $186.23 
B)  $168.23 
C)  $128.63 
D)  $135.00 
E)  $668.23

Question 3

The loan will have a term of 54 months and monthly payments of $385.13. The interest rate on the loan is 8.84% compounded quarterly. What is the amount of money that was borrowed?

Accepted Answer

A)  $17310.71 
B)  $17430.71 
C)  $17030.71 
D)  $17130.71 
E)  20368.27

Question 4

Mark deposits $900 at the end of each month in a savings account earning 4.5% quarterly. How soon can he buy his first car assuming that he needs $8 000 for a decent car.

Accepted Answer

A)  8.76 months 
B)  8.52 months 
C)  9.06 months 
D)  9 years 
E)  8.86 months

Question 5

What is the payment size of a loan that has semi-annual payments and an interest rate of 5.52% compounded monthly? The loan principal is $1641.12 and the loan is for 48 months.

Accepted Answer

A)  $321.74 
B)  $231.74 
C)  $123.74 
D)  $274.31 
E)  $$221.31

Question 6

For how long will Jessica have to make payments of $1200.00 at the end of every three months to repay a loan of $10 000.00 if interest is 12% compounded semi-annually?

Accepted Answer

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Question 7

For her daughter's university education, Carla Hackl has invested an inheritance in a fund paying 9.2% compounded quarterly. If ordinary annuity payments of $4750.00 per month are to be made out of the fund for 5 years and the annuity begins 7.75 years from now, how much was the inheritance?

Accepted Answer

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Question 8

A 21-year mortgage is amortized by making payments of $3052.61 at the end of every three months. If interest is 8.45% compounded annually, what was the original mortgage balance?

Accepted Answer

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Question 9

What is the discounted value of $3000.00 paid at the end of every six months for 5 years if interest is 8.00% compounded yearly?

Accepted Answer

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Question 10

You lease a car for monthly payments of $610.23 at the end of each month for 54 months. There is a no security deposit sale going on. The interest rate on the lease is 3.9% compounded annually. The buy-out is $19552 at the end of the lease. How expensive is the vehicle?

Accepted Answer

A)  $48683.26 
B)  $48863.26 
C)  $46683.26 
D)  $46863.26 
E)  $48633.26

Question 11

What is the discounted value of $4760.00 paid at the end of each year for 7 years if interest is 6.52% compounded quarterly?

Accepted Answer

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Question 12

Note: The calculations for this question were done using Excel's RATE function.
A $345 000.00 mortgage is repaid in 19 years by making monthly payments of $2486.44. What is the nominal annual rate of interest compounded semi-annually?

Accepted Answer

The answer of Note: The calculations for this question were...

Question 13

What is the accumulated value after 15.50 years of deposits of $500.00 earning interest at 4.00% compounded semi-annually if the deposits are made at the end of each quarter?

Accepted Answer

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Question 14

How many deposits of $6 100.00 made at the end of every 6 months are needed to accumulate to $172 000.00 at 5.24% compounded quarterly?

Accepted Answer

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Exam 12: Ordinary General Annuities